Since 2020, the term “ghost kitchen” has become all too familiar. But what does it really mean?
No, restaurants are not seeing an increase in paranormal activity—rather, a new phenomenon of shared kitchen space and opportunity.
What is a ghost kitchen?
In simple terms, a ghost kitchen is a restaurant without a storefront—it’s the kitchen only!
This could be a delivery-only concept, a catering business, or a direct-shipping CPG producer.
What stands it apart from other businesses is that the kitchen in use typically belongs to another restaurant or business. So Joe’s Cafe on Lexington, which closes at 6 pm, can rent out its kitchen at night to Allie’s Grilled Cheese, which delivers late-night grub across the East Side. It’s a win-win for everyone involved.
Why do I need a ghost kitchen?
A ghost/dark/cloud/shadow kitchen—there are countless terms for it now—isn’t for everyone. But it’s helpful for those on a low budget who want to take the chance on a new concept without breaking the bank.
Those renting out a ghost space are able to focus strictly on the food at a low rent, while host restaurants take care of the overhead. This gives entrepreneurs the chance to test a market without an existing customer base and prove success before committing to a brick-and-mortar. Think of it as an intro course for restauranteurs with a low barrier to entry.
Do I want a ghost kitchen?
Let’s look at your restaurant operation:
- I’m just getting started. Well, unless you have lots of available cash to spend on a store, equipment, signage, carpentry, and the leverage of the 10-year lease, then I would suggest looking into a ghost kitchen as a low-risk way to launch. Find out what works, collect data, use social media, see what your customers are telling you. If it’s not a winner, you’re able to pivot or try something else. If it’s a winner, then other options start opening up, from brick-and-mortar to multiple ghost sites.
- I have 1-5 places. Okay, you have your operation rolling, but how do you expand? A ghost kitchen is a great way to “fill out the map” for delivery and catering beyond your brick-and-mortar locations. It also gives you a chance to test new markets. If you’re doing well in Boston you might do well in Philly, DC, or NYC. With a ghost kitchen, you can try that out without the risk.
- I have 10-100 places. You have your operation down to a science. Ghost kitchens are the best way for you to achieve quick ROI area development. Let’s look at the suburbs, different cities, micro markets like college towns. All the while you train staff, get catering clients, and “soft launch” in many markets, for the price of a security deposit in one location.
Let’s look at your meal kit/meal plan or CPG operation:
- Most meal kit companies are looking for regional exposure, so city center locations are less desirable. We would steer you towards locations outside a city, but within the metro area, to be able to serve as many people as possible. Ghost kitchens in this case should be close to highways and have loading docks.
- The same goes for Consumer Packaged Good CPG operations. Some commissaries are great options if they have in-house packaging and have licenses for sales across state borders (FDA or USDA). Otherwise you’ll be looking at the same types of ghost kitchens as meal kit companies that can suit your needs.
Does a ghost kitchen have the right licensing for me?
There are many different types and sizes of food operations and thus different licenses that address these types of businesses. Your responsibility is to know exactly what you need. What we can tell you is that ghost kitchen hosts are very motivated to get successful businesses in their kitchens, and many are willing to work with operators to obtain the correct license to allow for continued use of their space.
How to start a ghost kitchen
So you’ve got your food concept sorted and you’re ready to get started. You need to find a space licensed to legally sell food to consumers. Then you’ll be dealing with contracts, leasing, and navigating the payment process. Luckily, we’ve got a marketplace that matches you with available space in your area and does all of the above. Seriously, we want to make it as easy as possible for you to kickstart a new restaurant.
Narrow down your search
First: you need to find a kitchen! Local restaurants, cafes, hotels, bars, nightclubs, country clubs, you name it—they all have kitchen space just waiting to be utilized.
Think about what kind of space you need: are you looking for a kitchen just for a few hours or days? What about a month or more? What kind of equipment do you require: a pizza oven, a salamander, 50 feet of counter space? Make sure you're able to meet these needs before contacting a host to negotiate terms.
Find a delivery partner
Your food is prepped, now how do you get it out there? If you’re planning a delivery-only concept, you need to take care of the delivery part here. Your options are simple: handle deliveries yourself (or with additional staff), find a third-party delivery solution, or use a combination of both.
Delivery apps like ChowNow, DoorDash, and Postmates are a dime a dozen these days, and the difference typically narrows down to commission fees and convenience. To narrow these down, make a simple pro and cons list that takes into account revenue share, user base, location, and reliability.
Looking to handle delivery yourself? Remember that if you’re not doing it all yourself, you will need to find a staffing solution—and with that, a payroll solution. Find yourself a reliable driver with a reliable car and make sure your insurance covers off-premise activity.
While you’re at it, make sure you include the offset of delivery costs into your menu prices. Those fees add up fast and you don’t want delivery services to drain you of your profits!
Launch your concept and get the word out
This is the easy part—we promise. Sure, you hope your food will speak for itself, but the market is highly saturated, and you’ve gotta stick out. Here are some quick tips for marketing your ghost kitchen and making it a success:
- Build a website! Hungry people in your area are searching for food solutions, and Google makes it easy to keep search results local. Don’t have time to code a whole website? Start with a Google My Business page and connect with customers there.
- Maintain a social media presence: Instagram has 500+ million daily active users (DAUs) globally, and food goes viral fast. Create some unique reels, share some delicious photos, and don’t be afraid to send some perks to local food influencers.
- Set up a solid delivery presence. Coupons and features help—here are some guidelines from GrubHub, for example.
- Rely on word of mouth—it’s old school, but it’s always effective. Encourage people to share their food experiences or run “refer a friend” promotions, and watch the orders rise.
- Offer something unique in your delivery: Happy Meals work for a reason. Stickers, collectibles, or even a handwritten note will work to keep customers intrigued, loyal, and waiting to see what they’ll get next.
No matter which way you go, we’ve got a marketplace that matches you with available space in your area and does all of the above.